ttom gas pipelines in Florida to power plants in India to electricity-producing barges off the coast of Nigeria. "Every other white-collar case in history is arith- metic," one investigator said. "Enron is calculus." More troubling, ttom the pros- ecutors' perspectLve, was that lawyers and accountants had helped to create the part- nerships, which gave the beneficiaries of these arrangements a potentially formi- dable defense. "This is how we go about investigating these cases," the investigator said. "First, we have to explain it to our- selves, so that we know what was going on. Then we have to figure out if it's ille- gal. Then we have to figure out how to persuade a jury that it's illegal. And then we have to figure out how to explain why it's illegal even though the accountants and the lawyers said it was O.K." Rather than work ttom the bottom, prosecutors started ffom the side-that is, with Enron's accountants. In the com- pany's last days, before it declared bank- ruptgr, there were widespread reports of document shredding, not just at Enron but also at the once admired accounting firm of Arthur Andersen. Enron was An- dersen's biggest client in the United States, and was a huge source of business for both consulting and accounting services. Andersen auditors had approved many of the company's most dubious financial arrangements, including some of the partnerships, but prosecutors were wary of explaining such issues to a jury. In- stead, the task force decided that in its first case prosecutors would merely attempt to prove that Andersen had obstructed justice by shredding documents. Accord- ing to the investigator, "We made Ander- sen our first case because it was easy and it was obvious." It mmed out to be neither. Prosecutors already regarded Ander- sen as a repeat offender. In the few years before the scandal broke, the :firm had entered into civil settlements in two major cases in which it had been accused of negligence and misconduct; each time, Andersen had paid heavy fines and prom- ised that it had changed its ways. When the Enron investigation began, several top Andersen partners went to the Jus- tice Department, in Washington, and im- plored Michael Cherto then the Assis- tant Attorney General in charge of the criminal division and the lead negotiator for the government, to press civil, not criminal, charges against the firm. But in lVlarch of 2002 Chertoff and his subor- dinates, frustrated by Andersen's failure once again to admit wrongdoing, pushed through a criminal indictment charging the :firm with obstruction of justice. The theory of the case-shredding documents-may have been simple, but the defendant was not. The government rarely brings criminal cases against or- ganizations, because jurors often have a difficult time understanding how a com- --= <::> pany or a partnership, as opposed to a human being, can commit a crime. Even after David Duncan, the lead Andersen auditor on the Enron account, pleaded guilty to obstruction of justice, the trial of the :firm turned out to be arduous for the government lawyers. "They let themselves believe that Andersen was demonic," Rusty Hardin, the Houston lawyer who defended Andersen at trial, told me. "They thought everyone would give in, that they would cooperate against Enron." Not only did witnesses ttom Arthur An- dersen refuse to implicate Enron, they defended their own conduct as well. In the end, on June 15, 2002, after four weeks of testimony and ten days of deliberation, the jury did convict An- dersen of the single count against it, driving the eighty-nine-year-old firm out of business. The Enron task force was criticized about the Andersen case from several vantage points. Some said that the case reflected excessive zeal, be- cause the implosion of Arthur Andersen cost the jobs of thousands of employees, most of whom had nothing to do with Enron or with any other scandal. Others questioned the prosecutors' competence in almost losing what had looked like an easy case. Mter that, chastened prosecu- tors narrowed their focus to traditional kinds of criminal misconduct and turned their attention back to Enron. " F or all the complexity of the securi- ties laws and all the criminal activity that falls within the securities laws, pros- ecutors always. look at how juries will see cases," Daniel Richman, a former fed- eral prosecutor who is now a professor at Fordham Law School, said. "A jury is a group of people who may not be so quick to convict for activity that can be ex- plained away as the product of compli- cated accounting rules that reasonable people can differ on. What prosecutors correctly assume carries a lot more weight with a jury is personal enrichment by the people who later may claim that the ac- counting rules are too complicated to ex- plain." Kenneth Lay and Jeffrey Skilling may have supervised the company as a whole, but it appears that they did not in- vest in, or directly profit ttom, the ques- tionable off-the-books partnersrups. An- drew F astow, the chief financial officer, did-and thus became the major focus of the government's investigation.